Overcoming Opposition To Build Once-Controversial Mine

Kinross Gold’s Buckhorn Mine in Washington State, was the smallest of the company’s three growth projects to start production in 2008. And though it may not have been the biggest, it was a landmark achievement in other respects.

At one time, it looked as though Buckhorn would never be built.

When the project’s previous owners first proposed a large open pit operation at Buckhorn Mountain in the 1990s, the plan faced strong opposition from environmental groups and members of the local community.

Buckhorn was the subject of a heated back-and-forth fight for much of the 90s, gaining considerable profile in Washington State and forming battle lines between politicians and bureaucrats on both sides of the issue. In 2001, Crown Resources, then the owner of Buckhorn, scrapped its plans for an open pit operation and went back to the drawing board to come up with a new concept.

By the time Kinross acquired Buckhorn from Crown in 2006, the project had changed dramatically. It had been radically redesigned as an underground mine, with a much smaller footprint that minimized impact on the surrounding environment (see sidebar).

In a county hard-pressed for jobs and new business opportunities, many people in the community saw the upside of a new mine that promised to generate 180 new jobs. But with the mine’s controversial history, community support for the new Buckhorn plan was far from a given.

Another key step in gaining community trust and acceptance for Buckhorn was the formation of the Citizens’ Advisory Board (CAB). CAB represented a diverse cross-section of the local community and was an open forum to discuss potential impacts, and to ensure that the project was environmentally sound and minimally disruptive to the local community. CAB proved a highly successful forum for resolving concerns and resulted in a “good neighbour agreement” that outlines how the mine and local community can best work together.

The final step in paving the way for Buckhorn occurred in the spring of 2008. Kinross negotiated a settlement with a few remaining project opponents. Under the agreement, all permit appeals were dismissed, and Kinross agreed to fund third-party environmental monitoring and additional habitat restoration projects in the Okanagan Highlands, above and beyond commitments they had already made.

By the fall of 2008, trucks were hauling ore from the completed Buckhorn Mine down to the refurbished mill at Kettle River, some 76 kms away. In October, 2008 first gold was produced – the first of approximately one million ounces expected to be produced from the mine over the next nine years. Two decades after the project was initially proposed, Kinross and the community finally celebrated the arrival of Buckhorn.

Based on the existing proven and probable reserves at Buckhorn, the mine is scheduled to cease production in 2015. However, Kinross believes that there is potential for additional reserves and resources to be discovered near the present mine site.

In the first quarter of 2009, Kettle River-Buckhorn completed its first full quarter of operations, producing 27, 899 gold equivalent ounces with average gold grades of 19.5 grams per tonne.

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Quick Facts

LOCATION: Washington State, U. S.

EMPLOYEES: Approx. 200

NEAREST MAJOR CITY: Spokane, 250 km south;population 204,000

OWNERSHIP: 100% Kinross

MINING: Underground

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A Model For Small Footprint Mining

Kinross has embarked on a number of initiatives to keep the new mine’s environmental footprint small:

• Replaced the open-pit with an underground mine design

• Reduced surface land use from 787 acres to 117 acres

• Reduced overall water consumption by approximately 95%

• Employed a water treatment system that can reduce the presence of metal compounds to levels that are less than unaffected groundwater

• Reduced impacts to residents along the haul route by restricting truck haul times

• Provided funds for additional wetland, habitat and fisheries restoration, and local community improvement projects

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Project Timeline

January 2003 Kinross acquires Kettle River through the acquisition of Echo Bay Mines

August 2006 Kinross acquires Buckhorn through the acquisition of Crown Resources

September 2006 Site surface excavation starts at Buckhorn

August 2007 Buckhorn site construction 52% complete

January 2008 Mine development begins, and water management and treatment facility becomes operational

October 2008 Haul road operational and first gold poured

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